A company sets prices to break even on the costs of making and marketing a product, or to make a target return on investment. This approach is called:

Explanation

* Target Return Pricing calculates the exact price needed to cover total fixed/variable costs and achieve a specific target profit or ROI.
* Value-based relies on consumer perception; Penetration sets low initial prices; Competitive parity copies competitors’ rates.
* Break-even volume = Total Fixed Costs / (Price – Variable Cost per unit).